Terry Goddard Reaches Agreement with Publishers Clearing House

(Phoenix, Ariz. -- Sept. 9, 2010) Attorney General Terry Goddard, together with 32 states and the District of Columbia, today announced the filing of a stipulated supplemental judgment with sweepstakes company Publishers Clearing House (PCH), based in Port Washington, N.Y., that will increase protections for consumers who may have been misled by the company's marketing practices. In addition, the company agreed to pay $3.5 million to cover the cost of the states’ investigation.

The supplemental judgment was filed in Maricopa County Superior Court today and modifies the terms of a prior judgment filed in 2001.

Earlier settlements with Publishers Clearing House filed by numerous states in separate state actions in 2000 and 2001 included specific steps aimed at resolving the states’ allegations that PCH engaged in deceptive marketing practices by mailing promotional materials designed to mislead consumers into believing that purchases would increase their odds of winning.

The states’ recent investigation raised concerns that the company was not fully complying with the prior agreement and consumers could still be confused by the language of some of the sweepstakes mailings.

"Consumers should not have to wonder whether buying magazine subscriptions and other merchandise will improve their chances of winning a prize," Goddard said. "Publishers Clearing House is now required to be more clear that making purchases will not make a consumer more likely to be a sweepstakes winner."

The supplemental judgment includes stronger provisions than the prior agreement and additional measures to help ensure that consumers are not further misled or confused by the sweepstakes promotions. The company will appoint a special compliance counsel and ombudsperson to work with PCH to review mailings and make sure they conform to the terms of the 2001 and 2010 agreements.

The company also must send a letter to every consumer who spends $1,000 or more a year on PCH merchandise. The letter will explain that no purchase is necessary to enter the sweepstakes. The letter must include in bold type the following statement: "In fact, the majority of Publishers Clearing House winners did not submit an order with their winning entry."

A copy of the judgment is attached. For additional information, contact Molly Edwards at (602) 542-8019.